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June 1, 2016
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June 15, 2016
Medicare’s Home Health Care benefit has served the nation’s most vulnerable & frail seniors for a number of decades successfully. Home Health nurses have been working tirelessly to treat & educate patients and their families on how to stay healthy at home while decreasing hospitalizations, which saves the Government’s money.

How it has been offered up until now

Home Health Care Services are ordered by a Physician whenever a patient reaches a level of severity in which Hospitalization isn’t necessary but the need of constant clinical supervision is required. These patients are usually recently discharged from Hospitals after critical surgeries or major events such as Heart Attacks or Strokes.
Traditionally, a Home Health Care Agency (HHA) would receive a referral from a Physician & their nurse would evaluate & develop a treatment plan for the Patient and subsequently bill Medicare for the services.

New changes in the system

For a number of years now, CMS has been considering various proposals by MEDPAC & other organizations to introduce cost-cutting measures that would potentially decrease waste of Medicare dollars. One of the models that private insurances have been utilizing for the past number of years when it comes to paying for Home Health Services is the “Prior Authorization for services” model. CMS displayed intention of launching a similar prior authorization demo for Home Health Services back in February, 2016.
Advocates representing Home Health Agencies, consumers & other organizations representing Medicare beneficiaries presented their case in front of CMS and argued endlessly that introducing such a change in the industry will drastically impact in delaying care for patients in the most critical stages of health.
Despite rigorous efforts by such advocates, CMS announced on June 8th, 2016 that it will be moving forward in implementing the program under the title “Medicare Pre-Claim Review Demonstration for Home Health Service” and that it would start “no later than” August 1st 2016 in Illinois, October 1st in Florida, December 1st in Texas, and January 1st in Michigan and Massachusetts.
The “Medicare Pre-Claim Review Demonstration for Home Health Service” model allows Physicians to refer critically ill patients to HHAs for services. The Home Health Nurses are also allowed to evaluate the patient at Home, and even provide care for the patient. Then why are most Home Health Agencies, National Association for Home Care & Hospice, Consumer groups & Physicians protesting against this new setup?

How will services be rendered now?

As per the new model, deserving Home Health Care recipients will be referred by Physicians to Home Health Care Agencies. The HHAs are expected to conduct a thorough Evaluation of the patients Medical & psychosocial condition & start treatment immediately.
The Home Health Agencies are also allowed to send a Request for Anticipated Payment (RAP) as soon as the initial evaluation is complete (which is the current way of billing); however, CMS Now requires HHA’s to submit a “pre-claim review” request, along with “relevant patient documentation”. As of right now, this “relevant patient documentation” hasn’t been defined by CMS. Since this key factor hasn’t been identified, HHA’s are nervous about the outcomes of such audits & fear that they might face unreasonable denials as experienced in the “Probe & educate audits” conducted in the recent past.
If CMS denies the pre-claim review payment (the decision could take up to 10 days) then the Home Health agency is allowed to re-submit the claim and/or appeal the denial. In all of this time, CMS expects the Home Health Nurses, Therapists, Aides & Social workers to continue providing services without knowing if they will get paid or not.
If the claim for payment is approved, then the HHAs shall have the authority to submit a final claim (at the end of the treatment period) with a tracking number, indicating that the claim has been affirmed for pre-claim review.
Non-compliance: If an HHA doesn’t comply or fails to follow the instructions mentioned above, the claim wouldn’t be considered as denied, however payments shall not be made until CMS has completed a full “relevant patient documentation review”.
It is also mentioned in the rule that such HHAs shall receive a payment reduction of 25% for claims that are determined to be “payable” (after the documentation review). This 25% reduced payment penalty shall be enforced after 3 months from the launch of the “Medicare Pre-Claim Review Demonstration for Home Health Service”.

Why resist the change?

The Advocacy groups, Consumers & Home Health Agencies almost unanimously are alarmed & appalled at the new model that CMS has adapted to, as it directly affects patient care. A majority of experts in this field state that CMS simply does not have the resources & structure to give the thousands of pre-claim review requests a fair audit & approval, therefore depriving the most critical patients of care at home.


Home Health Advocacy groups such as NAHC (National Association for Home Care & Hospice) based in Washington, DC have acted on behalf of Home Health Agencies and communicated the industry’s concerns over the new Law. In May, a number of US members of Congress wrote to the Department of Health & Human Services & CMS and urged them to re-consider the proposed “Prior Authorization of Home healthcare” demonstration. In the letter, the members of congress pleaded to both the departments that the proposed model would “interfere with the patient-doctor relationship” and “is in conflict with the policy goal of moving toward patient-centered care”.<br />
Some other major points in the letter were:
• Home Health Agencies will feel restricted in providing care (without knowing if they will receive payments), resulting in increased costs to CMS as Hospitalization rate could go up.
• The limbo period (up to 10 days) in which CMS will conduct the pre-claim audit might cause unnecessary delays in patient care and place the frailest & oldest Medicare beneficiaries at risk

Moving Forward

Unfortunately, despite the advocacy and arguments made by the HHAs & members of Congress, CMS has launched the proposed plan with start dates in several states. Home Health Agencies are eagerly awaiting on some clarity from CMS on the documentation requirements which they would be asked for.
Experts predict that due to these sudden changes, small to medium sized Home Health Agencies will suffer tremendous losses and will be forced to close their doors.
Altamash Mir
Altamash Mir
Health Care Consultant & Blogger based out of Chicago, IL.

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